The Asset
Reinvestment
Logic Diagram
End of Asset Life Reinvestment
Decision Support Tool
1
Recall the distinction between strategic AM
and tactical AM

Strategic track (funding flow and policy focus)
•
•
•

Focus is on high-level “how many,when” - i.e., management strategy
group cohort projections based on conditional probabilities
Service Level and economic life sets life-cycle based renewal policies
framework (e.g., for ductile iron <8” renew after 6th total break or 3rd in
five years)
Strategic level risk mitigation strategies emerge (eg, increase valve
density, leak management program, I&I mitigation, etc)
Tactical track (CIP focus)
•
•
•
•
Focus is on “which,when”?
Condition/usage based direct assessment (physical deterioration
model – conditional probabilities - linked to likely failure mode)
Service level/capacity business rules
Economic life
•
Select appropriate risk and economic/financial analytic techniques
End of Asset Life Reinvestment
Decision Support Tool
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12,000
500
10,000
400
8,000
300
6,000
200
4,000
100
2,000
2105
2102
2099
2096
2093
2090
2087
2084
2081
2078
2075
2072
2069
2066
2063
2060
2057
2054
2051
2048
2045
2042
2039
2036
2033
2030
2027
2024
2021
2018
2015
2012
0
2009
0
Asset Values - $M
600
2006
Expenditure - $M (Current Dollars)
Strategic level - how many assets in timeframe
period will likely fail and at what cost each (this
sets funding framework)
OCSD Expenditure - Total Future Predicted Cash Flows
Year
End of Asset Life Reinvestment
Decision Support Tool
CIP Existing - Current Program
CIP New - Future Growth
CIP New - Future Levels of Service
CIP - Future Rehab and Replace (New Levels of Service / Growth)
CIP - Future Rehab and Replace (Plants)
CIP - Future Rehab and Replace (Collections)
Operations (Operations)
3
Tactical level – which assets within a CIP cycle
will likely fail (list of capital projects)
ID
District
Facility
DISTRICTS 1, 4 AND 5
1
1
Collection System
Involved Assets
BRE of
Asset
Description of Project
Various
Collection System
Pump Station
Industrial Parkway
Ind Pkwy PS - Below Ground Structure
63
Pump Station
Cayuga
Cayuga PS - HVAC
45
I/I Rehabiliation
Perform vibration analysis, pumping
evaluation, design new pumps,
replace pumps, evaluate control
system
Replace Wet well Roof AHU
Pump Station
Industrial Parkway
Ind Pkwy PS - HVAC
45
Replace Wet and Dry Well Roof AHU
1
Pump Station
Cayuga
Wet Well Chain Pull
50
4
Pump Station
Pump Station
Pump Station
Depew
Vanderbilt
Broadway East
Cranes
Cranes
Cranes
ORF Chlorine Chamber/Gates
21
30
ORF Washwater Fill Pump Station
30
ORF Washwater Pumps
21
Flow meters/Force Main Ball Valve
30
Flow Meters/ORF Ball Valve
30
2
1
3
1
4
5
Process Area
4
Pump Station
Depew
30
6
4
Pump Station
Bowmansville
Wastewater Pumps
20
7
4
Pump Station
Vanderbilt
Pumping System/Force Main Evaluation
40
8
4
Pump Stations
Aurora N/Aurora S
Pump Stations
9
5
Pump Station
Eastern Hills
EHPS - Below Ground Structures
10
11
12
5
5
5
Collection System
Collection System
Collection System
Transit Road
Goodrich Road
Spaulding Lakes
Collection System
Collection System
Collection System
End of Asset Life Reinvestment
Decision Support Tool
81
Redesign wet well chain pull to
remove comminutors
Redesign crane system
Redesign crane system
Redesign crane system
Add additional gates to drain CCT
Redo submersible pump station and
creek intake
Replace ORF washwater pump
Remove and replace valve stem,
repair flow meter, modify valve
chamber so valve can be easily lifted
out
Repair flow meter, modify valve
chamber so valve can be easily lifted
out
Evaluate pumps and piping and
replace as necessary
Evaluate capacity of pumping
system, resize pumps if necessary.
Various Improvements
Replace below-ground steel
structures with FRP
Replacement of ACP
Various Improvements
Various Improvements
Source
Existing CIP
At-Risk Assets
At-Risk Assets
At-Risk Assets
At-Risk Assets
At-Risk Assets
At-Risk Assets
Existing CIP
At-Risk Assets
Existing CIP
Existing CIP
Existing CIP
4
Start
1.
Review strategic
levels of service &
tolerable risk limits
2.
Review minimum
levels of
performance at
asset level
4.
Review condition,
performance
3.
Review business
rules for service
level & capacity
failure
Conceptual Decision Process Flow:
“End of Asset Life” and its role in the
Asset Reinvestment Decision
(This process is executed on a periodic, recurrent basis)
No
6.
Review likelihood
of failure score
5.
Is performance
score/capacity
≥ designated
trigger?
Putting the pieces
together – looking
one final time at
the whole flow
Yes
8.
Review
consequence of
failure score
7.
Review remaining
effective life
9.
Review current
risk mitigation
strategies
10.
Review Business
Risk Exposure
score (BRE)
11.
Is BRE within
tolerable risk
limits?
No
12.
Determine feasible
risk mitigation
alternatives
Yes
16.
Continue to run
and monitor
(to step 3)
13.
Project life cycle
costs of feasible
alternatives
No
15.
Is proactive
reinvestment
cost effective?
14.
Test proactive
strategy?
Yes
(Yellow Flag
Rule)
Yes
Legend
No
Associated template
17.
Within CIP/Ops
budget
window?
Link to PowerPoint slides
Decision node
Associated workbook or
worksheet
Yes
Link to advanced materials
Flow termination
18.
Schedule for
funding
Action step
End
End of Asset Life Reinvestment
Decision Support Tool
No
(Red Flag
Rule)
Note that projects
must still be
validated and
prioritized before
a capital
budget/plan is
finalized
5
Consider: have we made a solid business
case?

Can we demonstrate
this is the best
investment solution
of the feasible
options considered?

Can we demonstrate
this is the right time
to effect the
investment?
End of Asset Life Reinvestment
Decision Support Tool
6
Our fundamental “take home” message


Cost effective re-investment in an asset requires an
understanding of when that asset reaches its “end of
life”.
The end of life for an asset involves a systematic
interaction among three “triggers”:
• Service level/capacity life
• Physical life
• Economic life

Reinvestment is really a decision process where the
practitioner systematically determines for a specific
asset or class of assets which of the three triggers
trips the reinvestment decision first and at what point
in time.
End of Asset Life Reinvestment
Decision Support Tool
7
The End of Asset Life Reinvestment Decision Support
Tool is available for download at
http://water.epa.gov/infrastructure/sustain/am_training.cfm
These slides are embedded in the Tool.
End of Asset Life Reinvestment
Decision Support Tool
8